Segment Information

Our products and services are delivered through four segments – Research, Events, Consulting and Talent Assessment & Other, as follows:

•

Research provides trusted, objective insights and advice on the mission-critical priorities of leaders across all functional areas of the enterprise through research and other reports, briefings, proprietary tools, access to our analysts, peer networking services and membership programs that enable our clients to make better decisions. Gartner's traditional strengths in IT, marketing and supply chain research were enhanced in 2017 with Gartner's acquisition of CEB, Inc., which added CEB's best practice and talent management research insights across a range of business functions, to include human resources, finance, sales and legal.


•	Events provides business professionals across the organization the opportunity to learn, share and network. From our flagship CIO event Gartner Symposium/ITxpo, to industry-leading conferences focused on specific business roles and topics, to member-driven sessions, our events enable attendees to experience the best of Gartner insight and advice live.


•	Consulting provides customized solutions to unique client needs through on-site, day-to-day support, as well as proprietary tools for measuring and improving IT performance with a focus on cost, performance, efficiency and quality.


•	Talent Assessment & Other helps organizations assess, engage, manage and improve talent. This is accomplished through knowledge and skills assessments, training programs, workshops, and survey and questionnaire services.

The Company evaluates segment performance and allocates resources based on gross contribution margin. Gross contribution, as presented in the table below, is defined as operating income or loss excluding certain Cost of services and product development expenses, Selling, general and administrative expenses, Depreciation, Amortization of intangibles, and Acquisition and integration charges. Certain bonus and fringe benefit costs included in consolidated Cost of services and product development are not allocated to segment expense. The accounting policies used by the reportable segments are the same as those used by the Company. There are no intersegment revenues. The Company does not identify or allocate assets, including capital expenditures, by reportable segment. Accordingly, assets are not reported by segment because the information is not available by segment and is not reviewed in the evaluation of segment performance or in making decisions in the allocation of resources.

The following tables present operating information about the Company’s reportable segments for the periods indicated (in thousands):



Three Months Ended March 31, 2018	Research		Events		Consulting		Talent Assessment & Other (1)		Consolidated
Revenues	$	763,924	$	46,087	$	82,896	$	70,658	$	963,565
Gross contribution	531,456		16,190		24,124		43,044		614,814
Corporate and other expenses									(623,525		)
Operating loss									$	(8,711	)



Three Months Ended March 31, 2017	Research		Events		Consulting		Talent Assessment & Other		Consolidated
Revenues (2)	$	511,306	$	35,269	$	78,594	$	—	$	625,169
Gross contribution (2)	351,113		13,567		23,937		—		388,617
Corporate and other expenses									(335,103		)
Operating income									$	53,514

(1) In April 2018, the Company sold its CEB Talent Assessment and CEB Workforce Survey and Analytics businesses. These two businesses were acquired in April 2017 with the CEB acquisition. The results of these businesses are included in the Talent Assessment & Other segment results for the three months ended March 31, 2018. Additional information regarding these divestitures is included in Note 2 — Acquisitions and Divestitures.

(2)

In 2017, the Company began reporting the results of its Strategic Advisory Services ("SAS") business in Research whereas previously the SAS business was reported with Consulting. As a result, revenues of $6.7 million pertaining to the three months ended March 31, 2017 were reclassified from Consulting to Research to be comparable with the current year presentation. Gross contribution of $4.4 million for the three months ended March 31, 2017 was also reclassified from Consulting to Research.

The following table provides a reconciliation of total segment gross contribution to net (loss) income for the periods indicated (in thousands):



	Three Months Ended
	March 31,
	2018			2017
Total segment gross contribution	$	614,814		$	388,617
Costs and expenses:
Cost of services and product development - unallocated (1)	8,458			1,057
Selling, general and administrative	487,745			304,244
Depreciation and amortization	68,056			16,530
Acquisition and integration charges	59,266			13,272
Operating (loss) income	(8,711		)	53,514
Interest expense and other, net	34,160			5,017
(Benefit) provision for income taxes	(23,284		)	12,064
Net (loss) income	$	(19,587	)	$	36,433


(1)	The unallocated amounts consist of certain bonus and related fringe costs recorded in consolidated Cost of services and product development expense that are not allocated to segment expense. The Company's policy is to only allocate bonus and related fringe charges to segments for up to 100% of the segment employee's target bonus. Amounts above 100% are absorbed by corporate.